I saw a quote recently from IFPI (DMR 2010) that claimed the global content industry was worth around 1.4 trillion dollars per annum.

At the time, I remember scoffing and haw hawing.

Yet, dear reader, I am about to show you how John Kennedy vastly underestimated the value of the Content Industry.

Copyright owners have consistently pushed for longer copyright terms.

Yet in itself, we have discovered that copyright is not a catalyst to spur innovation. It is merely the justification for litigation.

Interestingly, Copyright is designed to return to the owner (not the creator) a fee, which as well as allowing one to pay the bills, is also a form of approval rating. The more fees collected, the higher the audience approval.

Yet today, the only persons collecting fees from 57% of all audio-visual content on the internet are the carriers who charge for each byte that transits their network.

The charges range on a global basis from a few cents per gigabyte in the information rich countries like the USA and Japan, where bandwidth is plentiful and essentially uncapped; through to dollars per gigabyte in information poor countries like Australia.

On the Internet, in those countries where data is not restricted by duopoly Telco agreements and all ISP’s and carriers peer their local
content, consumer choice is driven by crowd sourcing.

Curiously, no-one has analysed the entertainment value of these P2P sourced files.

On TVU, there are the links to 356,775 television show episodes being added to at the rate of 142 new shows per day.

The ratings vary from 4.5 (very good) down to .5 or 1 (not so good).

The number of clicks next to each episode shows the popularity. (I call this TVU Ratings…:-))

A number of company’s like Vquence analyse YouTube memes and patterns.

Neilsens tell us what is popular today on free to air and cable, yet Neilsens do not measure the content that the majority of the world is watching.

Personally, I find myself chuckling with mirth equally at Public Domain episodes of “I love Lucy” and the “Big Bang Theory”, however, this may be because of my advancing years. (I actually know who Lyndon Johnston was.)

As entertainment fodder, each program in it’s own way has fed my hedonistic appetite for content that entertains.

Therefore the value of the content has a value to me as an individual. The value is the dollar amount I am prepared to commit to to be
entertained.

We calculated the value of personal leisure-time last year. For a moment we will disregard that and estimate the value of life earnings
against total life expectancy.

Earnings

Years

Days

Hours

Minutes

Lifetime

75

365

24

60

$ 1,000,000.00

$13,333.33

$ 36.53

$ 1.52

$ 0.03

If my life earnings are a million dollars, then I should spend no more than three cents per minute if I expect not to go into debt.

If we take into account unemployment numbers, discretionary entertainment is down to around 11%. However, for the purposes of this blog article,
let us consider that it could be as high as 33%.

If we accept that Food, Housing, Medical, Transport and Clothing represents 66% of every dollar earned, then we have a discretionary budget of
one cent per minute for our entertainment content.

That means that a song on iTunes is worth 5 cents.

A movie (90 minute) 90 cents.

A half hour TV show (22 minutes without the advertising) is worth 22 cents.)

(These fees of course need to include the download cost….)

It can be argued that items of intense interest qualify for a premium viewing fee.

However, any increase in the 1 cent per minute means that I need to forgo Food, Clothing, Housing Transport or medical.

Let us assume that I pay one dollar for a song form iTunes. I now have to listen to that song 20 times before I have broken even on my
purchase. For a popular music item, 20 replays is easy to imagine.

Let us now consider an episode of “I Love Lucy”. Assuming I paid $1.99 (Amazon episode price) I would need to watch that episode of “I
love Lucy” nine times during my lifetime to stay on budget.
Highly unlikely.

However I could “share it” with eight other people and stay financially viable.

OR…
I could purchase the content on my credit card and go into debt.

When entertainment costs mean that people are unable to eat, pay their electricity [For New South Wales people that has a whole new meaning on your electricity bill starting today….], buy clothing, keep the roof over one’s head or afford to get medical care, then one needs to reanalyze ones spending habits.

Purchasing a $75.00 Blueray DVD is just not a realistic expenditure possibility for 93% of the worlds population. Mainly because of the 125 hours (@$0.60 per) of no content viewed required to pay for the credit card debt.

Consumers have started to realise that plastic without a job is not a viable option.

The pricing of discretionary entertainment options have not yet reached realistic pricing levels. I foresee a future where the Telephone Companies distribute all content for free and collect the transit fees.

The current choices for consumers are to:

Go into credit card debt to be entertained;

Not be entertained;

Download from the Internet for just the bandwidth costs;

Borrow DVD’s from better heeled peers and family;

Find a cheaper entertainment alternative;

Obviously, regardless of the legislative activities being forced on our parliamentarians by industry paid lobbyists, most will elect option 3.

Not because they are pirates and not because they don’t want to pay for the content.

But because the content is not priced within their budgetary allowances.

So what is the budgetary allowance of the average person on planet earth ?

The average salary (globally) is around $(USD) 9000.00 per annum.

Earnings

Years

Days

Hours

Minutes

Lifetime

75

365

24

60

$ 675,000.00

$ 9,000.00

$ 24.66

$ 1.03

$ 0.02

Down 33%. I now have only .675 of a cent to spend on non essentials. (that’s nearly one seventh of a cent, not 67 cents.)

If we accept that audio visual entertainment takes up an average of four hours and eleven minutes of our daily lives, then .675 equals 166.05
per day, ($1.66), or; $1,095,930,000,000 per day.

What is the real total value of sustainable Global spend on discretionary expenditure?

$59,400,000,000,000

A valid reason to put the prices of content DOWN.

Rob Wells of UMG (Vivendi) summed it up very nicely in the DMR2010 Report;

“ We’re much closer to the utopia, where we’re extracting €1 out of a million consumers as opposed to €10 out of a thousand.”

Well Rob, very soon, all content will be on the phones. How about a buck a day from everyone on planet earth for all content ?

Great idea… before those YouTube people take-over plant earth…. 25 hours a minute of newly created content. Wow!

Fig 1. – YouTube Video Uploads

Koltai Left and Right Brain conversation:

Who gets the money from that ?

Oh, Google and the Telephone companies.

Do the Telephone companies own any content ?

Apart from Vivendi ?

Yes, apart from Vivendi.

And Apart from Time Warner ?

Yes, Apart from them also.

Does iTunes owning part of Disney count ?

Are they a Telephone company ?

No.

Then they don’t count.

So is this something that Jobs overlooked ?

It would appear so.

So with all this content, who gets the most number of viewers ?

According to Comscore….

* by Videos Viewed

Total U.S. – Home/Work/University Locations Apr-10

Property

Videos
(000)

Share of
Videos (%)

Total Internet : Total
Audience

30,317,131

100

Google Sites

13,087,462

Hulu

958,176

3.2

Microsoft Sites

643,711

2.1

Viacom Digital

383,776

1.3

Yahoo! Sites

370,947

1.2

Vevo

331,730

1.1

Fox Interactive Media

320,372

1.1

CBS Interactive

316,930

1

Turner Network

304,729

1

AOL LLC

237,356

0.8

And what do they watch ?

According to the recent Pew Internet Report, [N=750] the average audio-visual content consumed is…

%
Online Video Watchers viewing:

Aged

18-29

Aged

30-49

Aged

50+

%

%

%

Comedy or Humourous Videos

93

74

52

News Videos

56

72

59

Educational (How-to ) videos

49

64

52

Movies or TV Shows

62

49

30

Music Videos

56

52

29

Political Videos

46

45

37

Animation or Cartoons

46

34

15

Sports Videos

34

37

16

Commercials or advertisements

26

23

16

Adult

16

11

6

We posted this chart last month. We include it here for ease of reference.

We explained that over twenty-five hours of video content was being uploaded to Youtube, twenty four hours per day.

If we compare that to all Television episodes; (we blogged this last month, chart according to IMDB here),
and;

if we allow that each Television Episode is between 22 minutes and 44 minutes average length, we could say arbitrarily that all TV episodes are 32 minutes long. On that basis, we have 27,375,488 minutes of entertainment representing 456,258.13 hours which if created by YouTube fans would be created and uploaded in 18,250.32 minutes which is only 304.17 hours or 12.67 days.

In other words, what took the various content creators globally, seventy years to create, is replicated every 12.7 days on YouTube and from the
looks of the YouTube growth curve, it is just at the beginning of its hockey stick.

If you ask me, I would say that the content horse for traditional forms of content, has bolted.

Content Creators will need to now compete with funny shorts created by the guy or girl next door.

3D as an industry innovation, is an excellent commencement. I look forward to seeing what the industry will think up next to compete with:

YouTube, Computer Games and exacerbated by a lower willingness to commit to high levels of personal debt.

Conclusion:

The future of the worlds economy is in the hands mainly of persons of whom 93% prefer short humorous videos.

YouTube is at the Genesis of a new Industry – dominated by amateur videos. Which is shaping up very similar to the earlierst days of the motion picture industry.

Koltai Prediction:

All content will be streamed for free by 2020 chosen by crowd sourcing friends views.

A few hundred blog articles ago, I estimated the number of movies that the average human might attempt to watch in their lifetime.

Assuming the first movie is watched at age 5 and we accept an additional 70 years of movie watching at two movies per day, with no repeats… [so these stats are for non-Foxtel viewers] then the average person on planet earth can watch:

Years

70

Movies per day

2

Days in a year

365.25

Total Movies in a Lifetime

51135

Fig. 1 Total Movies viewed per lifetime.

We started with IMDB being the largest film and other content database in existence, globally. Unfortunately, as expected, we obtained
mixed results.

First we walked the IMDB database for the content types.

Fig. 2 All Content – All languages – all years.

Feaure Films

247,053

15.7%

TV Movie

54,942

3.5%

TV Series

59,430

3.8%

TV Episode

855,484

54.4%

TV Special

2,381

0.2%

Mini Series

5,801

0.4%

Documentary

95,847

6.1

Video Game

7,037

0.4%

Short Film

171,654

10.9%

Videos

74,396

4.7%

Total

1,574,025

Source: IMDB Database

Then we analysed a subset of the data to determine accuracy.

The quality of data in the IMDB database as a historical resource is excellent.

Unfortunately, from a statistical viewpoint, there are data entry anomalies that detract from its accuracy due to the untrained publicus input.

e.g.: According to IMDB there are 1284 Feature films from amongst 9,872 pieces of content filmed inclusive of 1906. [Search used]

IMDB lists a “Romance” film “Miss Jerry” as the first feature film ever created in 1894. However, in the absence of the length of the movie, we will consider it to be a movie short, i.e. most probably 20-50 seconds in duration and not really a candidate for inclusion in the feature film classification.

Miss Jerry (1894) The adventures of a female reporter in the 1890s. Romance 6.9/10(Although, how five people managed to view an 1890 film, who also happen to be IMDB visitors, so that it could be rated, is beyond me…..)

Most content of a similar nature has been inserted into the “Video” classification of IMDB.

Of these 1284 “feature films, only one movie qualifies as a feature film in that it consisted of multiple, reels of film.

The first multi-reel film was the “Kelly Gang” produced in Australia in 1906 and shown to audiences in London in 1907. -

Therefore we know that from 1891 to 1906, there are 1283 incorrect classifications (out of 1284). This gives us an unacceptable error
percentage which unfortunately disqualifies the database from providing a determinative result.

Therefore we need to look at alternative methods for calculating only multi-reel feature films from 1907 till today…..

We already have the numbers for total films produced by the worldwide industry

Fig 3. Screen Digest Totals (Plus Nigeria for 2006)

Number of feature films produced Globally

2004

2005

2006

2007

2008

4019

4441

5583

5018

5085

Sources: Screen Digest, June 2005, June 2006, July 2007, July 2008 and July 2009. Nollywood – 2006 – UNESCO

N.B. 2006 includes 800+ movies from Nollywood, 2004, 2005, 2007, 2008 do not include any Nollywood movie numbers.

There is no complete list of all movies, therefore we “fudged” a result. (Counting only English Language Movies.)

We extrapolated from a known base the first year and the number of films last year and got to approximately 116,142 which is based on a smooth growth curve of 4.95% per annum increase in the number of movies produced.

So if we count these “shorts” and all known [non Government or Commercial] documentaries, then the total would equal over 446,000 or approximately 170,966 hours of video entertainment.

Of course, this doesn’t include foreign language films, or the IMDB “video” category [euphemistically referred to as the “Romance” videos],nor does it include TV series, Mini series et al as in the above table, and if we then break it down by years, we get something that looks like this….

Other errors and omissions are attributable to the thousands of lost movies as companies went out of business and private archive collections were lost to natural disasters and war.

We estimate [from a cursory shallow analysis] that there could be as many as an additional 61,000 items of historical content not listed in any of the databases that we accessed to compile these numbers. e.g.: According to [Brown, 1997]; “One of the most exciting recent events in Britainto affect early cinemastudies has been the discovery of the film copyright collection at the Public Record Office, Kew. Hidden among the tens of thousands of copyrightrecords for photographs that exist between 1862 and 1911 are afew hundred records for motion picture films.” [Guestimate based on number of “finds” over the last decade – approx. 55 movies found per year.]

The above graph would tend to suggest that technology drives creation and demand.

Persons reviewing the above graph and noting the drop off from 2005, need to consider other A/V publishing environments [e.g. [YouTube, Metacafe] before jumping to conclusions about industry reversals.

(Alternative new technology often generates disruptive influences on established technologies.)

These charts are about production and not consumption. They are indicative of economic conditions enabling creation rather than ticket sales.

Additionally, the IMDB database contains 7,000+ video games from around 1990 and this should be taken into account.

Further we note that the IMDB Database considers that dubbed movies are equal to original movies.

e.g.:

Most Popular Chinese-Language Feature Films/Videos Released No Later Than 2010

Australia (2008) Set in northern Australia before World War II, an English aristocrat who inherits a sprawling ranch reluctantly pacts with a stock-man in order to protect her new property from a takeover plot. As the pair drive 2,000 head of cattle over unforgiving landscape, they experience the bombing of Darwin, Australia, by Japanese forces firsthand. Dir: Baz Luhrmann With: Nicole Kidman, Hugh JackmanAdventure | Drama | History | Romance | War
165 mins.

Single Man (2010) The story is originated in Gujiagou Village, 150km from Beijing, the Capital of China. The wife of the… Dir: Jie HaoComedy

94 mins.

We only get to, all up, 22 titles.

Yet we know that the Chinese people make approximately 250-300 films per annum. (We published the 2005 stats in a previous article.

“The statistics on Chinese film production in 2005 was:Number Type3 Blockbusters (over 100 million RMB Production budgets. E.g.: The Promise)10 10-50 million RMB240 1.5-3 million RMB (These films are restricted to TV and/or DVD release only because of budget constraints)”.

Yet nobody bothers to upload that data onto the IMDB database.

If we look at Germany as the country of origin, we find in position one, “Inglorious bastards” …

Most Popular German-Language Feature Films/Videos Released No Later Than 2010 With Country of Origin Germany

Feel free to disagree and nominate a different method of calculating the quantum.

We added Nigerian and several European and Asian country movies. (+1.034%)

Back to our Couch Potatoes….

No of awake hours in an average lifetime? 404,217

So for all you couch potatoes out there…. If you want to view all the content…. You better get started….

P.S.: The Bad News…..

Youtube users are now uploading 24.5 hours of video content every minute.

We will review and chart YouTube on another day…. However, as an indicator, the total YouTube videos uploaded already exceed all previous commercial content created from 1889 to the present.

Youtube Videos Watched

2,000,000,000

Per Day

83,333,333

Per Hour

1,388,889

Per Minute

730,000,000,000

Per Year

8 Minutes

Average Length

97,333,333,333

Hours

64,888,888,889

Equivalent
Movie Attendances

Sorry couch potatoes… You’re too late. Unless of course, you’re a sci-fi fan, in which case…. If you can find an Atlantean chair and fast-forward all the content at 3000 frames a second… and it doesn’t overload your synapses… then… maybe…

Postcript…..

We leave you with a thought – as always…

Does anyone see any similarity between the following Picture and the shorts in Fig. 5 above ?

The First four Youtube Videos with Running Time Shown

Seems like when persons are trying something out for the first time, they make only short versions to ensure they can master the technology.

Might be an indication of where the world is going….

References:

As always – this is a blog – therefore Bib is slightly disorganised.

(We have cut back the Bibliography as just the UNESCO references ran to three pages – we have supplied a cross section of the relevant
references as an indication of the quality of the numbers.)

The History of Film The Pre-1920s Early Cinematic Origins and the Infancy of Film

The National Film Archive in Prague has largest library of film literature in the Czech Republic containing a collection of film
scripts (more than 9,000), a collection of some 65,000 books, film magazines from all over the world, a reference library, etc.

Filmsandtv contains a large movie database you can search by movie title, actor, genre, and Oscars. Read and search celebrity news and show the top ten boxoffice movies. Show TV series and TV episode descriptions along with TV schedules. Play movie trivia.

The Australian film industry got off to a flying start, producing what was probably the world’s first full length feature film in 1906. The
film was the Tait brothers production The Story of the Kelly Gang, a success in both Australian and British theatres

A friend rang me today to inquire after my health, residence on planet earth and basically, “Why havent you been blogging lately?”

So – to those that come in searchof Koltai-isms, I apolgise for my sporadic posting.

Regular readers will remember last October that I blogged about a court case that I was involved in. Well, it’s hotting up, in fact the hearing is next week, the culmination of three years worth of litigation….. and yes, I’ll let you know the result, if I’m allowed too.

Fans should send their “For he’s a jolly good fellows” to the judges chambers.

Detractors, just move along, this is just another boring Koltai post.

———————————————–

Chris and I speak on a regular basis about Life the Universe and everything.

Originally published on Perceptric by Tom Koltai at 06:02PM (EST) on March 7, 2009

Sharing is a community thing and has been since the time of Adam. (Think Apple – Eve, not Jobs)

But Ipoques’ latest report states that P2P file sharing is down 6.9% year on year.

They go on to explain that the drop is balanced by http traffic from sites like Rapidshare. Users are moving to this kind of site in droves, sick and tired of being harassed by companies like Media Defender, Bay/TSP and DTECnet. And sick of Governments legislating SafeHarbour Acts that require ISP’s to disconnect the users.

Smart users figure that if their download looks like port 80 http traffic then it is less likely to be interdicted, interfered with, or have the brakes applied to it by ISP’s who want to stay out of trouble with content companies.

At Perceptric, we have a theory, the harder and higher the level of interdiction, the greater the push-back from
the p2p community.

Anecdotally, it is the author’s hypothesis that the real P2P “buzz” is almost over. That interdiction, filtering, Denial of Service attacks are all pretty much about to become a moot point. After all – where is the fun in collecting grains of pretty coloured pink sand on a beach when you live on the beach?
Lack of scarcity eventually cures the P2P download-desire from even the most dedicated down-loader.

Many readers would know that I regularly conduct tests of the P2P networks for anomalies, memes and themes.

It rises in the East.
A curious statistic that P2P file users are now more likely to be located between the middle east and China. This is the new P2P majority.

One of my recent research efforts was to research all Tom Cruise movies spanning the period 1986 – 2009 to
determine whether P2P traffic hurts or assists Box Office sales.

Cruise’s most current movie, Valkyrie shows some interesting statistics. I noticed this morning that out of the 1120
connections – 912 were from China.Source:
Perceptric Pty. Ltd. Corporate Data

(All 1120 connections

– some lines represent 50+ connections – i.e.: Reverse trace-route on this map shows the city relating to the IP address.)

China is an interesting study for anyone wanting to understand the potential benefit or harm of P2P activity on a country. It does not have the same onerous ISP “Safe Harbour” reporting provisions imposed on it by the government.

The Chinese cinema industry now ranks third in the world behind Hollywood and Bollywood.
Up until mid-2004, prior to production, every script had to be submitted to the Film Censorship Committee of SARFT in order to be considered for a potential filming permit, thereby making the film “legal” for distribution in the 3200 Chinese cinemas.

Recently film industry restrictions have been loosened somewhat to facilitate a growing Chinese film industry. However, before this breakthrough –

Chinese cinema celebrated its centenary in 2005 with 250+ films produced that year setting a new record as television began to dominate the Chinese entertainment market in the early 1980s. In 2005 the Chinese economy
grew a staggering 9.8%, but the film industry reported phenomenal growth: 22.6% for the same period.

Due to the decreased censorship, people’s interest in cinema was revived. Community sentiment went from “The film is merely government propaganda” in the 1990’s to the point where cinema ticket sales continue to grow at an aggregate 33% per annumEven so – Chinese officials still consider that western films add to a widening “cultural deficit” and as a result it is impossible for Hollywood studios to vertically integrate through the value chain by owning a majority share in the theatres. As a result of this policy Hollywood has never reached market dominance.

So now I repeat the question….. “What are Chinese people doing watching Tom Cruise in English?”

At least 912 Chinese people who downloaded Cruise’s “Valkyrie” movie would have seen what a final solution revolution looked like in another place and time where the state had absolute power.

The statistics on Chinese film production in 2005 was:

Number Type

3 Blockbusters (over 100 million RMB Production budgets. E.g.: The Promise)
10 10-50 million RMB
240 1.5-3 million RMB (These films are restricted to TV and/or DVD release only because of budget constraints).

Therefore, if Chinese people want a big screen experience during each calendar year, they are restricted to a choice of 13 domestically produced movies – plus overseas Hollywood content.

The average wage in urban areas in 2006 was 1750 Yuan a month or just under $US60.00 per week, and the imperative according to western movies is that capitalists speak English.

So if your daily entertainment budget (after feeding the family) equals $1.30 – are you likely to spend it on visiting the cinema? Or would you buy 20 blank DVD’s and visit a friend’s place who has an Internet connection?

Hollywood may turn its back on China and figure that it is too hard to make a buck there. But the Chinese are
definitely not turning their backs on Hollywood. And when a billion Chinese have their hard discs full of Hollywood content and act as seeders within P2P networks the total ubiquity of all content will not be far away.

And as we all know scarcity drives price.

So once all content is universally available, what will it be worth per unit?